BUS FPX 4068 Assessment 2

Case 1: Fraud Detection and Prevention at a Garden Center

Jacob Kent, general manager for a large Columbus garden center, oversees a multi-department operation with multiple control processes to manage cash revenue. Nevertheless, there have been recent worries about potential check-fraud plans within the company, as evidenced by a check that was bounced to non-Alien funds. In light of this situation, it is necessary to look into the potential fraud plans and undertake control actions to detect and prevent fraudulent activities. Moreover, processing store analysis can recognize workers who might be able to engage in such fraud.

 Possible Check Fraud Schemes and Control Processes:

• Check change: Workers can substitute the check that they have received from customers or substitute the payment or amount.
• Check fraud: Workers can sign the check or make bogus checks.
• Check kitting: Time delay in the check processing in the treatment can help employees to gain from false balance provision.
• Including actions:
• Separation of duties: Multiple responsibilities can hinder collusion for cash handling, preparing deposits, and including accounts.
• PIN entry requirement: The requirement for distinct PIN entry for every transaction raises accountability.
• Periodic reconciliation: The sales report, the deposit slip, and the bank statement can identify periodic harmony deviations.
• Employee training: Moral behavior can be encouraged by educating employees at risk of fraud and results.

Identifying Employees at Risk:

• Treasurer and department head: Employees responsible for making the cash and preparing for deposits are in an excellent state for fraud.
• Seller: You can exploit their access to the records by entering the PIN code for transactions.
• Managing Director: While there are no options, the GM’s oversight responsibility makes them also cautious about fraudulent operations.

Case 2: Financial Reporting Integrity at the Keel Company

Finance directors of Kail Company have moral and accounting issues after the company’s Heather Locard, a profitability slump, and a shift in ownership pattern. Here, she considers different options to keep earnings steady and raises questions about GAAP, Sami, and accounting.

BUS FPX 4068 Assessment 2:Case Studies

Acceptability under GAAP:

• The percentage of completion increases: It can breach the GAAP if not calculated on the precise estimates for the project completion.
• Identify revenue on standard contracts: Income recognition violates GAAP in advance without adequate collateral for collection.
• Mark-to-market accounts: Accounting method changes can be acceptable if disclosed and made as per the GAAP principles.

Financial Statement Fraud:

• Options 1 and 2 Potential accounts can create fraud from fraud if the financial condition of the company is utilized to intentionally mislead stakeholders.

Recommended Course of Action:

• Adhere to GAAP principles: Ensure integrity in financial reporting by adhering to installed accounting principles.
• Effective communication: Make the company’s financial situation clear for stakeholders such as new trustees.
• Seek alternative approaches: given long-term stability, seek alternative approaches that align with moral and legal requirements.

Case 3: SOX 404 Compliance for a Biomedical Company

A small biomedical firm, which is going public, is confronted with the challenge of securing SOX 404 compliance with only three employees, including the entire management team.

Feasibility of SOX 404 Compliance:

• Based on size, the company can acquire SOX 404 contaminaries utilizing the appropriate internal control and management structures.

General Steps for Compliance:

• Establish internal control: Utilize robust internal control for financial reporting, including duties and documents of procedures.
• Management structure: Enlarge the board with independent members possessing appropriate expertise.
• External audit: Appoint external auditors to evaluate compliance and insure stakeholders.

Lastly, every case stresses moral conduct, adheres to regulatory guidelines, and implements and financially reports effective checks for protection against scams to guarantee integrity.